Annual Report 2012

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13. Net Assets The significant provisions in the Corporate Law of Japan (the “Corporate Law”) that influence financial and accounting matters are summarized below: (a) Dividends Under the Corporate Law, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as (1) having the board of directors, (2) having independent auditors, (3) having the board of corporate auditors, and (4) the service period of the directors is prescribed as one year rather than the normal term of two years by its articles of incorporation, the board of directors may declare dividends (except for dividends in kind) if the company has prescribed so in its articles of incorporation. The Company’s present system meets the first three criteria but the twoyear service period of the directors does not meet the fourth criterion. Interim dividends may also be paid once a year by the resolution of the board of directors if the articles of incorporation of the company stipulate so. The Company’s articles of incorporation contain such a stipulation, and it pays interim dividend semi-annually by the resolution of the Board of Directors. The Corporate Law provides certain limitations on the amounts available for dividends or the purchase of treasury stock. 14. Segment Reporting Outline of Reportable Operating Segments Applied ASBJ Statement No.17 “The Revised Accounting Standard for Disclosures of Segments of an Enterprise and Related Information”, the reportable operating segments are components of an entity for which separate financial information is available and such as information is evaluated regularly by the board of directors in deciding how to allocate management resources and in assessing performance. The Company currently operates its business on a stand-alone basis with the divisional organization and evaluates the performance of sales and manufacture of each division regardless of their products. Accordingly, in our business segments, we divide our operations into 3 reportable operating business segments on the basis of its main products which each business segment treats with (Medical business, Pharmaceutical business and Materials business.) Medical business Domestic division sells injection- and infusion-related products, artificial organ-related products, highly functional products, dialysisrelated products and diabetes-related products. In the international division, head office plays the center role and place overseas sales and manufacturing base for medical equipment and sales injection- and infusion-related products, artificial organ-related products and diabetic-related products. 43 Nipro Corporation Annual Report 2012 (b) Increases / Decreases and Transfer of Common Stock, Reserve and Surplus The Corporate Law requires that an amount equal to 10% of dividends must be appropriated as legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Corporate Law, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Corporate Law also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred among the accounts under certain conditions by the resolution of the shareholders’ meeting. The Company’s legal reserve, which is included in retained earnings, amounted to ¥1,273 million (US$15,489 thousand) as of March 31,2012, and its additional paid-in capital, which is included in capital surplus, amounted to ¥635 million (US$ 7,726 thousand) as of March 31, 2012. Pharmaceutical business Mainly, domestic subsidiaries sell and manufacture injectable drugs, oral drugs and products by contract manufacturing like injectable preparations in kit form (kit preparations). Materials business In the field of glass for pharmaceutical purposes, we sell glass for glass tube, glass for ampoule. In the field of glass & materials products, we sell glass for thermos bottles and glass for lighting purpose. In addition, we sell container for combination products and undertake the contract sales of pharmaceuticals related to the container for kit preparations from pharmaceutical company.
Business segment information for the years ended March 31, 2012 and 2011 was as follows: Millions of yen 2012 Medical Reportable Segment Pharma- Materials ceutical Total Other (*1) Total Adjustment (*2) Consolidated financial statements Net sales: Outside ·························· ¥ 145,082 ¥ 40,079 ¥ 26,590 ¥ 211,751 ¥ 262 ¥ 212,013 ¥ — ¥ 212,013 Intersegment ················· 1,851 19,485 3,534 24,870 45 24,915 (24,915) — Total······························· 146,933 59,564 30,124 236,621 307 236,928 (24,915) 212,013 Operating income ···························· 17,078 2,986 2,408 22,472 230 22,702 (6,877) 15,825 Identifiable assets ···························· ¥ 219,306 ¥ 119,454 ¥ Other items 19,590 ¥ 358,350 ¥ 4,592 ¥ 362,942 ¥ 136,745 ¥ 499,687 Depreciation and amortization ········· ¥ 12,353 ¥ 8,037 ¥ 338 ¥ 20,728 ¥ 48 ¥ 20,776 ¥ 805 ¥ 21,581 Amortization of goodwill ··················· Investment to companies accounted 2,403 150 99 2,652 — 2,652 — 2,652 for by the equity method ················ — — — — — — 1,679 1,679 Capital expenditures ························ 23,944 13,789 1,104 38,837 — 38,837 688 39,525 Thousands of U.S. dollars (Note 1) 2012 Medical Reportable Segment Pharma- Materials ceutical Total Other (*1) Total Adjustment (*2) Consolidated financial statements Net sales: Outside ·························· $ 1,765,203 $ 487,638 $ 323,519 $ 2,576,360 $ 3,187 $ 2,579,547 $ — $ 2,579,547 Intersegment ················· 22,521 237,073 42,998 302,592 548 303,140 (303,140) — Total······························· 1,787,724 724,711 366,517 2,878,952 3,735 2,882,687 (303,140) 2,579,547 Operating income ···························· 207,787 36,330 29,298 273,415 2,798 276,213 (83,672) 192,541 Identifiable assets ···························· $ 2,668,281 $ 1,453,388 $ 238,350 $ 4,360,019 $ Other items 55,871 $ 4,415,890 $ 1,663,767 $ 6,079,657 Depreciation and amortization ········· $ 150,298 $ 97,786 $ 4,112 $ 252,196 $ 584 $ 252,780 $ 9,795 $ 262,575 Amortization of goodwill ··················· Investment to companies accounted 29,237 1,825 1,205 32,267 — 32,267 — 32,267 for by the equity method ················ — — — — — — 20,428 20,428 Capital expenditures ························ 291,325 167,770 13,432 472,527 — 472,527 8,371 480,898 Millions of yen 2011 Medical Reportable Segment Pharma- Materials ceutical Total Other (*1) Total Adjustment (*2) Consolidated financial statements Net sales: Outside ·························· ¥ 132,817 ¥ 38,005 ¥ 24,704 ¥ 195,526 ¥ 417 ¥ 195,943 ¥ — ¥ 195,943 Intersegment ················· 1,195 18,278 3,856 23,329 44 23,373 (23,373) — Total······························· 134,012 56,283 28,560 218,855 461 219,316 (23,373) 195,943 Operating income ···························· 18,437 1,658 2,701 22,796 88 22,884 (5,659) 17,225 Identifiable assets ···························· ¥ 178,938 ¥ 105,672 ¥ Other items 17,007 ¥ 301,617 ¥ 4,639 ¥ 306,256 ¥ 170,254 ¥ 476,510 Depreciation and amortization ········· ¥ 11,938 ¥ 8,296 ¥ 229 ¥ 20,463 ¥ 55 ¥ 20,518 ¥ 726 ¥ 21,244 Amortization of goodwill ··················· Investment to companies accounted 1,504 201 39 1,744 — 1,744 — 1,744 for by the equity method ················ — — — — — — 1,763 1,763 Capital expenditures ························ 14,879 6,809 103 21,791 — 21,791 1,532 23,323 (*1) “Other” is the business segment which is not included in the reportable segment and consists of real estate income and sales by headquarters. (*2) Adjustment is as follows: • Adjustment for the operating income at March 31, 2012 and 2011 include ¥110 million (US$1,338 thousand) and ¥333 million of elimination of inter-segment transaction and ¥(6,987) million (US$(85,010) thousand) and ¥(5,992) million of corporate cost, respectively. Corporate cost consists primarily of sales, general and administrative expenses and research and development cost which do not belong to the reportable segment. • Adjustment for Identifiable assets at March 31, 2012 and 2011 include ¥(54,853) million (US$(667,393) thousand) and ¥(57,266) million of elimination of inter-segment transaction and ¥191,598 million (US$2,331,160 thousand) and ¥227,520 million of corporate assets, respectively. Corporate assets consisted primarily of cash and deposit, investment securities, assets for development and assets for management division of head office which do not belong to the reportable segment. • Adjustment for depreciation and amortization at March 31, 2012 and 2011 are for corporate assets. Depreciation and amortization and Capital expenditures include long-term prepaid expenses. • Adjustment for capital expenditures is increase in corporate assets. Nipro Corporation Annual Report 2012 44
Page 1 and 2: Annual Report 2012 Year Ended March
Page 3 and 4: Consolidated Financial Highlights N
Page 5 and 6: On the occasion of the appointment
Page 7 and 8: profit-sharing is conducted in acco
Page 9 and 10: Pharmaceutical Main Products • In
Page 11 and 12: Message Managing Director Kazuo Wak
Page 13 and 14: Asia 41.9% Rate of Growth Measured
Page 15 and 16: 2. Pharmaceutical Business Currentl
Page 17: (2) Domestic Subsidiaries As of Mar
Page 20 and 21: Status of Corporate Governance 1. S
Page 22 and 23: CSR Nipro is able to conduct its bu
Page 24 and 25: Financial Review Overview In the cu
Page 26 and 27: the increase in income before incom
Page 29 and 30: Thousands of Millions of yen U.S. d
Page 31 and 32: Millions of yen Thousands of U.S. d
Page 34 and 35: Consolidated Statements of Cash Flo
Page 36 and 37: (f) Investment Securities Investmen
Page 38 and 39: 5. Pledged Assets The following ass
Page 40 and 41: 8. Financial Instruments (1) Circum
Page 42 and 43: 9. Derivatives The Company and its
Page 46 and 47: Loss on impairment of fixed assets
Page 48 and 49: Report of Independent Auditors 47 N
Page 50: NIPRO CORPORATION 3-9-3 Honjo-nishi

Annual Report 2012

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